Australia's wine export plummet 18 per cent by value

12 January 2009

Wine exports from Australia have plummeted 18 per cent in value during 2008, as the strong Australian dollar stunted exports during the first half of the year, to $2.47 million.

Data from the Australian Wine and Brandy Corporation indicated that wine exports also dropped 11 per cent in terms of volume in 2008 to 698 million litres. The industry, in fact, took a double hit during the second half of the year on account of the global financial crisis that dampened demand despite a better than expected grape harvest.

However, the silver lining around the otherwise dark clouds of bad news was that 2008 would still be recorded as the fourth highest year for the volume of wine exported from Australia. Asia seemed to have developed a taste for Australian wine, with the Chinese market alone growing 32 per cent in value.

The decline is the first in 13 years of wine exports for Australia, and is being attributed mainly to the dual causes of the global financial crisis for the second half of the year, and volatile exchange rates during the first half of 2008. The Australian reported that this was the first reversal of fortune the the industry witnessed in the 15 years that the AWBC has been compiling export data, and was the lowest revenue number since 2003.

Reports also quoted some analysts as saying that other than the global financial crisis and the exchange rate volatility, intense competition from wine producing nations was also a factor, as there were lower priced options available in the international market.

The elimination of import duties propped up Hong Kong at the third spot in terms of growth, with its imports going up 17 per cent to A$36 million. Japan's import of Australian wine increased four per cent to fifth in terms of value growth, reports said.